Prime Benchmark

Prime Benchmark

July 2017

The US dollar depreciated against most Asian currencies by between 0.6% and 6.8% during the first half of 2017. This is reflected in the rental values of income-producing assets in Asia which have become relatively more costly in US dollar terms.

In local terms, prime office rental markets in most cities rose slightly but many are now late in the cycle. The China market saw a mixed picture, with rental markets in Shanghai and Guangzhou showing slow growth while Beijing and Shenzhen recorded modest declines. The Hong Kong market outperformed the other cities we monitor supported by PRC financial firms’ expansion.

The region’s retail rental markets moved by between -13.7% (Singapore) and +8.3% (Osaka) in local terms. The surge in visitors from China and Korea to Japan offered upside for the retail sector in Osaka. The Singapore market slumped as a growing volume of online retail had a negative impact on demand for malls.

Luxury apartment rents remained stable in most of the cities we monitored over the first half of 2017 except for Kuala Lumpur which fell by 3.3%. Luxury apartments in prime areas of Shanghai continue to be supported by a growing number of affluent families from other cities.

In the hotel sector, the EU visa exemption policy in Vietnam had a huge impact on room rates in Hanoi. Hanoi recorded the highest growth rate of 50%, followed by Singapore (11.6%), Manila (8.9%) and Kuala Lumpur (7.4%).